Lakshmi Narayan Hospitality Group Louisville v. Maria Jimenez ( 2022 )

RENDERED: SEPTEMBER 22, 2022
TO BE PUBLISHED
Supreme Court of Kentucky
2021-SC-0449-WC
LAKSHMI NARAYAN HOSPITALITY APPELLANT
GROUP LOUISVILLE
ON APPEAL FROM COURT OF APPEALS
V. NO. 2021-CA-0515
WORKERS' COMPENSATION NO. 2014-73573
MARIA JIMENEZ; HONORABLE APPELLEES
JONATHAN R. WEATHERBY,
ADMINISTRATIVE LAW JUDGE; AND
WORKERS’ COMPENSATION BOARD
OPINION OF THE COURT BY JUSTICE HUGHES
AFFIRMING
Maria Jimenez was employed by Lakshmi Narayan Hospitality Group
(Holiday Inn) on June 6, 2014, when she slipped and sustained injuries to her
neck, head, left shoulder, and back. The Chief Administrative Law Judge
(CALJ) awarded temporary total disability benefits on May 1, 2017. In 2019,
Jimenez’s claim was reopened pursuant to Kentucky Revised Statute (KRS)
342.125(1)(d) after she alleged a worsening of her condition. Holiday Inn
objected and asserted that res judicata barred reopening. Relying on Jimenez’s
deposition testimony and medical evidence, a different Administrative Law
Judge (ALJ) awarded Jimenez permanent partial disability benefits and future
medical benefits for treatment of her cervical spine. The Workers’
Compensation Board (Board) disagreed and determined that Jimenez’s claim
was barred by res judicata. The Court of Appeals concluded that Jimenez’s
claim was not barred and that the Board misconstrued the reopening statute,
KRS 342.125(1)(d) and (2), because nothing in the statute precludes the
reopening of an award of temporary disability benefits. This appeal followed.
For the reasons stated below, we affirm the Court of Appeals.
FACTS AND PROCEDURAL HISTORY
Maria Jimenez was employed by Holiday Inn and performed
housekeeping services at a Holiday Inn in Louisville, Kentucky. On June 6,
2014, Jimenez injured her head, neck, left shoulder and back when she slipped
and fell while cleaning a bathroom. Jimenez stated she hit her head and lost
consciousness. Jimenez filed a workers’ compensation claim on September 22,
2015, and at a June 20, 2016 Benefit Review Conference, the parties stipulated
that Jimenez sustained a work-related injury, that no temporary total disability
benefits had been paid, and that the defendant-employer had paid $11,322.43
in medical expenses.
On May 1, 2017, the CALJ awarded temporary total disability benefits
from August 15, 2014, through April 22, 2015. The CALJ determined that
Jimenez did not sustain a permanent injury and was not entitled to future
medical benefits.1 On July 25, 2019, Jimenez filed a motion to reopen due to a
1 According to the testimony given during the hearing before the ALJ on July
25, 2016, and the ALJ’s September 5, 2019 order to reopen, Jimenez did not make
any claims for permanent income benefits or future medical benefits in her original
claim.
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change in disability after being diagnosed with cervical disc disease and
depression on April 24, 2018. She also sought an award of permanent partial
disability benefits. In an affidavit, Jimenez maintained that her condition
deteriorated since May 2017 and that her pain level had increased. Holiday
Inn objected to reopening, citing the CALJ’s previous findings, including the
finding that Jimenez did not sustain a permanent injury, and res judicata.
On September 5, 2019, the CALJ granted Jimenez’s motion, recognizing
Holiday Inn’s res judicata argument but nevertheless determining that Jimenez
was entitled to pursue her claim of the subsequent development of work-
related depression and worsening of her physical injuries. Because Jimenez
made a prima facie claim by a showing of grounds to reopen due to change in
disability, her claim was reopened and assigned to a different ALJ.
On December 10, 2020, the ALJ entered an Opinion and Order finding
that res judicata was inapplicable, that Jimenez had sustained her burden on
reopening, and that she established worsening of her condition. The ALJ
awarded permanent partial disability benefits based on a 4% impairment
rating, as well as medical expenses that might reasonably be required for the
cure and relief from the effects of the work-related injury.
Holiday Inn appealed to the Board and on April 9, 2021, the Board
reversed and remanded the claim to the ALJ with direction “to dismiss this
reopening claim as barred by res judicata.” The Board determined that the
express and unambiguous language of KRS 342.125(2) is controlling. That
statute generally allows for the reopening of workers’ compensation claims for
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various reasons, including a change in disability. However, because the
original ALJ only awarded temporary total disability benefits for a specific
period, the Board held that the claim is not subject to reopening. The Board
concluded that although more recent evidence may support a conclusion that
Jimenez’s neck condition has deteriorated, the grounds for reopening were
insufficient. The Board held the ALJ’s original decision was supported by
substantial evidence and therefore was res judicata given the identity of the
parties, identity of the facts, and identity of the issues leading to the final
decision on the merits. BTC Leasing, Inc. v. Martin, 685 S.W.2d 191 (Ky. App.
1984). Relitigation of the issue of permanency was precluded pursuant to KRS
342.125.
On Jimenez’s appeal to the Court of Appeals, the appellate court held
that the Board misconstrued KRS 342.125 and erred in its res judicata
analysis. The Court of Appeals held that nothing in the plain language of KRS
342.125(2) precludes the reopening of a temporary total disability award and,
citing prior cases, noted the difference in the application of res judicata in
judicial proceedings and workers’ compensation proceedings. The appellate
court noted, quoting Stambaugh v. Cedar Creek Mining Co., 488 S.W.2d 681,
682 (Ky. 1972), that “[w]here the statute expressly provides for reopening under
specific conditions, the rule of res adjudicata has no application when the
prescribed conditions are present.” Holiday Inn appealed.
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ANALYSIS
The sole issue is whether, under KRS 342.125(1)(d) and (2) a claimant
can reopen a prior workers’ compensation claim in which no permanent partial
disability or future medical benefits were awarded. “Reopening is the remedy
for addressing certain changes that occur or situations that come to light after
benefits are awarded.” Dingo Coal Co. v. Tolliver, 129 S.W.3d 367, 370 (Ky.
2004). KRS 342.125 provides, in pertinent part:
(1) Upon motion by any party or upon an administrative law
judge's own motion, an administrative law judge may reopen
and review any award or order on any of the following
grounds:
(a) Fraud;
(b) Newly-discovered evidence which could not have
been discovered with the exercise of due diligence;
(c) Mistake; and
(d) Change of disability as shown by objective
medical evidence of worsening or improvement of
impairment due to a condition caused by the
injury since the date of the award or order.
(2) No claim which has been previously dismissed or denied on
the merits shall be reopened except upon the grounds set forth
in this section.
(Emphasis added.) Holiday Inn argues that Jimenez’s reopening claim is
barred by res judicata because the ALJ did not initially award permanent
income benefits or future medical benefits. It asserts that because the CALJ
held that Jimenez sustained only a temporary injury from the June 2014 fall,
the reopening is merely an attempt to relitigate the same issue of whether she
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sustained a permanent injury from the work incident.2 Given the plain
language of KRS 342.125(1)(d), we disagree.
KRS 342.125(1) allows the reopening and review of any award or order,
provided one of the grounds for reopening contained in subsections (a) through
(d) is satisfied. Jimenez sought to reopen her workers’ compensation claim due
to a change in her disability, satisfying subsection (d). In Dingo Coal, the Court
explained that KRS 342.125 outlines the proof required to grant a motion to
reopen while KRS 342.730 governs “the merits of a worker’s right to receive
additional income benefits at reopening . . . .” 129 S.W.3d at 370. The statute
does not restrict or limit reopening to particular types of claims or awards. It
does not, for example, allow reopening in claims in which permanent income
benefits were awarded but prohibit reopening in claims in which only
temporary income benefits were awarded.
By its very language, reopening of a claim under KRS 342.125(1)(d)
involves the determination of a claimant’s disability at two different times—the
degree of disability when the claim is originally filed and the degree of disability
2 Holiday Inn also asserts that the Court of Appeals misconstrued its argument
by focusing on permanent partial disability benefits. The appellate court stated that
“[t]he sole issue on appeal is whether under KRS 342.125(1)(d) and (2) a claimant can
open a prior workers’ compensation claim in which no PPD was awarded.” Holiday
Inn concedes that res judicata does not always bar reopening under KRS 342.125 if
permanent partial disability benefits were not awarded in the underlying claim.
Further, it asserts that a claimant could reopen a claim under KRS 342.125 if
permanent partial disability benefits were dismissed but future medical benefits were
awarded. However, because we ultimately hold that neither an award of future income
benefits nor future medical benefits is a pre-requisite to reopening pursuant to the
plain language of KRS 342.125(1)(d), Holiday Inn’s allegation that the Court of Appeals
misconstrued its argument is immaterial.
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when the claim is reopened. This ground for reopening involves a change in
impairment “since the date of the award or order.” KRS 342.125(1)(d).
Obviously, if ALJs were permitted to dismiss claims in those instances where a
seemingly temporary injury progresses into a permanent injury then it would
create an exception to KRS 342.125(1)(d) that is not expressed in the statute.
The statute clearly allows the reopening of a claim if there has been a change in
disability without limitations regarding the type of benefits originally awarded.
KRS 342.125(1)(d).
As this Court’s predecessor recognized in Messer v. Drees, 382 S.W.2d
209, 212-13 (Ky. 1964):
Time often tells more about medical cases than the greatest of
experts are able to judge in advance . . . . [E]ven the permanence
of a disability theretofore thought to be temporary “is of itself in the
nature of a change.” When subsequent events indicate that an
award was substantially induced by a misconception as to the
cause, nature or extent of disability at the time of the hearing,
justice requires further inquiry. Whether it be called a “mistake”
or a “change in conditions” is a matter of mere semantic taste. The
important question is whether the man got the relief to which the
law entitled him, based upon the truth as we are now able to
ascertain it.
(Internal citations omitted.) In short, the observable symptoms necessary to
support a permanent disability award can become more manifest over a period
of time extending beyond the original proceedings.
When interpreting a statute, the Court must “assume the Legislature
meant exactly what it said, and said exactly what it meant.” Univ. of Louisville
v. Rothstein, 532 S.W.3d 644, 648 (Ky. 2017). If the plain language of the
statute is clear, our inquiry ends. Id. If the legislature intended to restrict the
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reopening of workers’ compensation claims to only claims in which distinct
types of benefits were awarded, it could have included such language. It did
not. KRS 342.125(1) contains clear limitations on the reopening of claims by
only allowing reopening in instances of fraud, newly-discovered evidence,
mistake, or change in disability, demonstrating legislative intent. If further
limits on reopening were preferred or intended by the legislature, they could
have and should have been stated.
Holiday Inn also emphasizes the fact that the permanency of Jimenez’s
injury was already litigated because the original CALJ dismissed Jimenez’s
claim for all future and permanent income and medical benefits. The original
order and award states that “[t]here is no evidence of permanent injuries so
there is no basis for an award of permanent income benefits” and “[b]ecause
Jimenez does not have a permanent injury, or otherwise have evidence to
support the need for permanent income benefits, no such award will be
made.”3 Therefore, Holiday Inn argued, and the Board concluded, that
reopening of Jimenez’s claim was barred by res judicata.
3 The first reference to any issue of permanency arose in the independent
medical examination report by Dr. Michael Best, who evaluated Jimenez at Holiday
Inn’s request. His report, dated August 20, 2015, states that 2014 MRI images show
“no objective evidence of a permanent harmful change in the human organism” and
that Jimenez met “no criteria for permanent impairment—0% whole person.” Dr.
Disha Shah, who treated Jimenez for her neurological symptoms, also opined that
Jimenez was not permanently impaired. In a statement of proposed stipulations
submitted by Holiday Inn, it stipulated that Jimenez sustained only a temporary
injury but contested whether her injury was temporary or permanent.
To the extent that Holiday Inn suggests or implies that Jimenez initially alleged
a permanent injury or put that in issue, the record establishes that she did not. While
Jimenez’s introduction of the permanent injury issue, or lack thereof, is
indeterminative of the resolution of this appeal, given our interpretation of KRS
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Res judicata is basic to our legal system. As this Court held in Yeoman v.
Commonwealth, Health Policy Bd., 983 S.W.2d 459, 464-65 (Ky. 1998), “[t]he
doctrine of res judicata is formed by two subparts: 1) claim preclusion and 2)
issue preclusion. Claim preclusion bars a party from re-litigating a previously
adjudicated cause of action and entirely bars a new lawsuit on the same cause
of action. . . .”
The application of these principles to final workers’ compensation
decisions is grounded in the fact that because there is an extensive
procedure for taking appeals, a final decision should not be
disturbed absent fraud, mistake, or other very persuasive reason
that would warrant reopening. KRS 342.125 grants some relief
from the principles of the finality of judgments by permitting a
reopening in instances of fraud, mistake, newly-discovered
evidence, or a change of condition that causes a change of
occupational disability.
Slone v. R & S Mining, Inc., 74 S.W.3d 259, 261 (Ky. 2002).
Workers’ compensation is a creature of statute. As set forth in
Chapter 342, workers’ compensation proceedings are
administrative rather than judicial. Although the principles of
error preservation, res judicata, and the law of the case apply to
workers’ compensation proceedings, they apply differently than in
the context of a judicial action. For that reason, authority based
upon judicial proceedings is not necessarily binding in the context
of proceedings under Chapter 342.
Whittaker v. Reeder, 30 S.W.3d 138, 143 (Ky. 2000). Our predecessor Court
held that “[w]here the statute expressly provides for reopening under specified
conditions, the rule of res adjudicata has no application when the prescribed
342.125, it bears mentioning that she did not initially claim a permanent injury and
the reopening does not constitute her attempt to relitigate an issue she previously
raised.
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conditions are present.” Stambaugh, 488 S.W.2d at 682. The ALJ determined
that a condition prescribed by KRS 342.125(1) for reopening was present.
In addition, the application of res judicata in this context in which a
claimant seeks to reopen their claim due to a change in disability would
undermine the purpose of the workers’ compensation system.
The primary purpose of the Workers’ Compensation Act is to
aid injured or deceased workers and statutes are to be interpreted
in a manner that is consistent with their beneficent purpose. The
overarching purpose of the workers’ compensation chapter is to
compensate workers who are injured in the course of their
employment for necessary medical treatment and for a loss of
wage-earning capacity, without regard to fault, thereby enabling
them to meet their essential economic needs and those of their
dependents.
Kindred Healthcare v. Harper, 642 S.W.3d 672, 679 (Ky. 2022) (quotations and
citations omitted). Larson’s Worker’s Compensation Law states
It is almost too obvious for comment that res judicata does
not apply if the issue is the claimant’s physical condition or degree
of disability at two entirely different times, particularly in the case
of occupational diseases. A moment’s reflection would reveal that
otherwise there would be no such thing as reopening for a change
in condition.
12 Larson’s Workers’ Compensation Law § 127.07[7] (2022) (footnotes omitted).
As such, res judicata does not bar the reopening of Jimenez’s claim for a
change in disability.
CONCLUSION
We conclude that the Board misconstrued KRS 342.125 because nothing
in the plain language of that statute precludes reopening of a temporary total
disability award. A determination that a claimant has a permanent injury or
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awards of future medical or income benefits also are not prerequisites to
reopening. Therefore, we affirm the Court of Appeals.
All sitting. All concur.
COUNSEL FOR APPELLANT:
E. Shane Branham
Shelton, Branham & Halbert, PLLC
COUNSEL FOR APPELLEE:
Phillipe W. Rich
Phil Rich Law
ADMINISTRATIVE LAW JUDGE:
Hon. Jonathan Weatherby
WORKERS’ COMPENSATION BOARD:
Michael Wayne Alvey, Chairman
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